Living paycheck to paycheck: do I pay off credit cards or try to save?

I'm 28 and just purchased my first home last year (with the help of my parents). I have an advanced degree but work in the public sector so I do not make a lot of money and I have a lot of school loans. Right now, I live paycheck to paycheck and have only a couple hundred in savings. I also have a large amount of credit card debt (about $15k with varying APR from 4.99-9.99). I am wondering if it is better to save the little that I can or work on paying off my credit cards. Any suggestions?

Kind of a tough call because I hate to see people carrying credit card debt. However, in your particular case, I'd lean towards trying to build up a "reserve" of some kind. This is mostly due to the fact that you are a new home owner. When you own your own home, you always have to be prepared for something to go wrong. It might be something minor but you should always have a few thousand dollars available to cover the "unexpected."

Right now, you have just a few hundred dollars saved -- that is probably not even enough to cover the deductible on your homeowners insurance if something major should happen. I'd work towards getting a home reserve in place. Even if you have to start small, that is fine. Try to get $100 per month into an emergency fund. With any luck, everything will be fine with the house and you won't need to tap the fund for something home-related. In that case, you have a little something set aside for all the other detours in life like a job loss or a health issue.

Having a "reserve" fund is doubly important now that insurance companies are quite willing to cancel your insurance for as little as two claims in the course of a year. When you don't have a lot of spare cash, you might be tempted to file a homeowners insurance claim when you suffer even a minor loss, but you need to look at your home coverage as something that only gets used in the case of real catastrophic loss. Filing claims when your backyard grill is damaged by falling tree limbs in a storm will get you a check for a few hundred dollars, but you will likely find yourself without coverage if another claim gets filed in a year or two.